BMW appears to be testing a small hydrogen hybrid based on the 1 Series hatchback in Europe, according to Autopia.

The car features a 109-horsepower electric motor, a 5 kW fuel cell, and a conventional internal combustion engine. Before, BMW was working with hydrogen in regular combustion engines directly, like with the earlier, much larger 7 Series Hydrogen (pictured).

So this is a new step--and an interesting one. The idea is to use the fuel cell to power a small electric motor around town, and then kick in the gas engine for highway driving. The report said that according to a BMW diagram of the drivetrain, the internal combustion engine powers the front wheels while the electric motor powers the rear wheels--more fodder for the front-drive BMW debate.

No word yet on when we'll see something like this in the U.S., though other automakers are still working on the problem.